Efficiencies comparison of Islamic and conventional banks of Pakistan

This study investigates the comparison between the efficiency of Conventional and Islamic Banks of Pakistan. The history of conventional banks of Pakistan is very affluent in comparison to the Islamic banks. Islamic banking industry in Pakistan is in its early stages, very few banks are operating in this sector which performs pure Islamic banking. For this study, we take a sample of five Islamic and five conventional banks from (2005-2009). A DEA model is applied to measure the efficiencies of both banking sectors under CRS and VRS approach. The results show that the TE of conventional banks is better than the Islamic banks, but in CE and AE both sectors show a healthy competition. The t-statistics shows that there is no significant difference in mean efficiencies scores of conventional and Islamic banks except in year 2008.